Generally, no. Some vehicles — such as those that are heavily discounted with rebates and other incentives — will take a big hit on depreciation because the money that comes off the top also undermines the resale value. On the other side of the coin, in cases of extremely high demand and low supply, some buyers who have been able to snag a highly popular model at or near suggested retail price have actually been able to resell at a profit. That is rare, however, and hinges on being able to find someone hungry enough to pay a premium.


Depreciation varies by band and model, so it is impossible to make a blanket statement, though typically it is greatest on a percentage basis in the first year. Depreciation also is typically measured on an annual basis, not by a stopwatch, so it is hard to say how much value a vehicle loses as soon as it leaves the showroom.

Here are some examples of how depreciation varies, using residual-value estimates from ALG, an authoritative source widely used by the leasing industry.

ALG says a Chevrolet Impala LT will retain 40 percent of its original value after two years, 35 percent after three years and 29 percent after four years. In comparison, a Toyota Camry XLE will retain 60 percent of its original value after two years, 50 percent after three and 44 percent after four.

There are several reasons for this disparity. First, Toyotas in general tend to have higher resale values than Chevrolets because of perceived value and their respective reputations. The Impala also is nearing the end of its current product cycle, and the Camry was redesigned for 2012. Fresh designs tend to have higher resale than models about to be replaced. Moreover, a higher percentage of Impalas is sold to rental fleets, and in a year or two they will be released in large numbers into the used-car market, driving down resale values.

In addition to ALG, the Kelley Blue Book is another authoritative source that can help you determine which brands and models have low depreciation. You can choose a specific model and optional features, and KBB can calculate trade-in values, retail prices and private-party sales prices based on mileage and condition.

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Answered by Rick Popely on September 15, 2012 in I'm Just Wondering | Permalink

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